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the dollar was supposed to be convertible.

Or at least to have a stable purchasing power, which is what the Gold Standard was presumed to insure. But we know, at least those who understand anything about Keynesian macro, that what is needed is a money supply that increases as total economic activity increases. That makes economic growth possible. Additionally, it should be possible to deliberately increase the money supply to counter private sector pull backs during times of uncertainty when all others are fearful and won't invest. Dollar inflation at least met the first requirement under the Breton Woods agreement.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 11:57:11 AM EST
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